What to check in a copier lease agreement before you sign

Before you sign a copier lease agreement, find eight things in it: the term, how it renews, the page minimums, what service covers, any annual increases, who pays the property tax, what returning it costs, and who wipes the hard drive. Most of the surprises we see in copier contracts come from one of those eight, and all of them are in the paperwork on the day you sign.

This post is for a new lease you haven’t signed yet. If you already have one that’s coming up for renewal, our copier and phone contracts page covers how renewals work.

1. The term and how it renews

Find the length of the lease and the renewal clause. Many copier leases renew on their own unless you send notice within a window before the end date, sometimes only a few weeks wide. Write that window on a calendar the day you sign. If the agreement says it renews for another full term, negotiate that before you sign.

2. Page minimums and overage rates

Many leases bundle a set number of pages into the monthly payment and charge for every page over it. Others charge a minimum whether you print it or not. Compare the minimum with what your office really prints in a slow month, and check whether black and color pages are counted separately.

3. What service covers

Check whether toner, drums, parts, labor and travel are included, and whether there’s a response commitment in writing. The lease is often with a finance company while the service comes from the dealer, so the two can be separate agreements. Make sure you have both and that they end on the same date.

4. Annual increases

Look for a clause that lets the payment or the page rate go up each year. A small yearly increase over a long term adds up, and it’s easy to miss because it isn’t in the first invoice.

5. Property tax

Find out who pays the property tax on the copier and how it’s billed. The answer depends mostly on the type of lease (GreatAmerica).

On a fair market value lease, the cost can reach you two ways. Some leasing companies pay the tax and send you a separate bill, usually once a year, often with a processing fee for each device (Canon Financial Services; Pitney Bowes). In the leases we review, others build it into the monthly payment. If the agreement says you’ll reimburse taxes “as invoiced,” plan on a separate bill.

On a $1 buyout lease, the copier goes on your own business personal property report. In Louisiana that’s the LAT-5 you file with your parish assessor each year, and the same form asks you to list equipment you lease from others and who owns it. Leased equipment you don’t list can be assessed as if it’s yours (LAT-5 instructions, Lafayette Parish Assessor).

6. Size and changes during the term

Check what happens if you need a bigger or smaller device before the term ends: whether you can upgrade, what the remaining balance does, and what ending the lease early costs. We see many offices leasing a copier sized for far more work than they do, so get the size right before you sign.

7. The end of the lease and returning the copier

Returning a leased copier costs money, and the agreement decides how much. In the Canon Financial Services agreements we read, the customer sends the equipment back at its own expense to a location the leasing company chooses, in good working order apart from normal wear, and pays to repair anything that isn’t (Canon Financial Services). Look for these costs:

• 01Removal, packing and freight to wherever the leasing company says, which may be out of state.
• 02A return or processing fee. Both Canon Financial Services agreements allow one equal to the greater of a full payment or a flat amount (Canon Financial Services).
• 03A restocking fee, which some leasing companies charge to cover reselling the copier, sometimes as extra payments (GreatAmerica).
• 04Repairs to bring the copier back to good working order.
• 05Payments that continue until the copier is back. One agreement bills a full payment for every billing period the return is late.
• 06Wiping the hard drive, which the agreement may leave to you (more on that below).

Then read the notice terms. Many agreements renew month to month at the same payment unless you send written notice before the end, 60 days in the Canon agreements, and some renew for longer, up to another full year (GreatAmerica). Put the notice date on a calendar, and get the return instructions and costs in writing before you send it.

8. The hard drive

Most office copiers store images of what they copy, print, scan and fax on a hard drive. The FTC recommends settling in the lease who will wipe or keep the drive when the copier goes back, and warns against pulling the drive yourself because it can hold firmware the copier needs. For an office that handles client, patient or financial records, get the wipe in writing, with a certificate. NIST SP 800-88 Rev. 2 is the standard most wipe certificates refer to.

Questions to ask the dealer

• Can I see the full agreement, including the service terms, before I decide?
• How many pages does the monthly payment include, and what does each extra page cost?
• Does the payment or page rate go up during the term?
• Is property tax built into the payment or billed separately each year, and is there a fee for handling it?
• What’s the notice window to avoid renewal, and how must notice be sent?
• Who wipes the hard drive at the end, and do I get a certificate?
• What does returning the copier cost: freight, a return or restocking fee, and repairs?

We’ll read a copier contract with you for free. Book a 15-minute call and bring the agreement or the quote. See our managed print services.

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